The MT Diary: Some of my best builders are Poles

Howard Davies discusses his trip to Warsaw, the problems facing Sarkozy, and Europe in 2012.

by Howard Davies
Last Updated: 22 Dec 2011

Warsaw is not the most thrilling location one can imagine for a conference in the middle of winter. Am I exaggerating to make a point? I think not. Indeed, one might more accurately say: 'Warsaw is the least thrilling location one can imagine for a conference ...' That would be more honest, but some of my best friends are Poles - they really are.

Some of my best builders are, too. As I left the house for my flight I had to climb over a Polish bricklayer, who is repairing our front steps (The weird thing about Polish builders is that they actually turn up at 8am if they say they will - solid proof that east Europeans do not acclimatise culturally in the UK.) 'I'm off to Warsaw,' I said cheerfully, to make him feel at home. 'Aah,' he said somewhat cautiously, 'was there in 1980s, was - how you say - sniper in Polish army,' levelling a trowel-shaped rifle menacingly at my forehead, 'have nice time.'

I did not have 'nice time' in the Dominique Strauss-Kahn sense and indeed had rather a nasty time getting there. BA cancelled its flight with one of those circular explanations it specialises in - 'inbound plane did not arrive' - and handed out tickets for a convenient quick connection via Prague. But I didn't get one. I wonder quite what the point of a gold card is in these circumstances.

Eventually, five hours late, I made it and was put up in a hotel room with a splendid view of the Palace of Culture, Stalin's gift to the Polish people, a gift that keeps on giving, as a reminder of the warm pleasures of the Soviet embrace. The Poles have a way of pretending that it doesn't exist, even though it dominates the skyline - it's like ignoring what Dame Edna calls Buckminster Castle.

Just as Lisbon-Paris flights are full of concierges, the Warsaw-Paris flight is full of plumbers. The Polish plumber has achieved political salience in France as a symbol of the evil consequences of the single market. How can the French workman retain his sacred right to strike on the day before each public holiday if the Poles are ready to step in at a moment's notice to remove any offending blockage? It drives the French unions round the bend, to coin a phrase.

French politics are in an unusual condition. In spite of the travails of the euro and an incipient recession, Sarkozy himself is on the up. That is partly because the Socialists, in the finest traditions of the left, are keener on knocking spots off each other than on fighting the incumbent. Also, at times of crisis, the French seem to like the idea of a frenzied little Napoleon, bouncing from summit to photo-op, creating the impression that the French are equal partners with their German cousins. He has not discouraged the coinage 'Merkozy'.

The reality is quite different. The French are price-takers in this arrangement. While Germany's creditworthiness is secure, France's triple-A rating is looking fragile, especially if she is called upon to support other euro countries. An extension of the European Financial Stability Facility to backstop Italy, for example, could well trigger a rating downgrade. Like DSK's manhood, it has been pressed into service too often.

Cameron had been trying to exploit the credibility he built up with Cher Nicolas during the Libyan campaign, popping over for lunch in the Elysee Palace whenever he could. Having eaten there a couple of times, I would certainly exploit an open invitation to dip my snout into that particular trough. But do any consequences flow, except a warm well-fed feeling that carries one through the afternoon? The outcome of the fateful summit strongly suggests they do not. Lunch was just lunch.

Seen from the Faubourg Saint-Honore, the Coalition's concerns seem parochial and beside the point. Are the politics of the Eurosceptic Tory right of any interest when the future of democracy itself is in doubt in Italy and Greece, where they claim they dreamt up the whole idea?

As we can see from the actions of the increasingly assertive European Commissioner Michel Barnier, the implicit veto power London used to have over financial regulation initiatives in the EU has now gone. He is planning to dismember the big accounting firms and knock the rating agencies into line. Euro transactions will have to be cleared inside the zone in future, if he and the European Central Bank have their way. And a new financial transactions tax, which just happens to be structured to raise most of its yield in London's markets, would pay for future continental bail-outs.

Since most of these wheezes can be implemented through qualified majority voting and since we have few allies today, having left the European People's Party and generally pissed off most of our partners, there are tough negotiations ahead. The attempt to solve them all at one go, by making a financial services opt-out a condition of accepting a new treaty, did not fly.

At least George Osborne, unlike Gordon Brown, makes an effort to go to finance ministers' meetings (when he can get an invitation), so he retains some negotiating capital. But for the UK, 2012 will be a tough year on the European front. I do not know if Barnier has yet visited the occupation in front of St Paul's, but he is making a better job than the happy campers of putting the frighteners on the City. The Brown deal, whereby we allowed a Frenchman to run the City in return for Baroness Ashton doing whatever it is she does, looks worse and worse by the day.

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